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INFORMATION AND

COMMUNICATION TECHNOLOGY

AMENDED SECTOR CODES

(07 November 2016)

WHAT DOES ICT REFER TO?

ICT stands for Information Communications Technology. ICT refers to any device or

system that allows the storage, retrieval, manipulation, transmission and receipt of digital

information. For example, personal computers, digital television, email, robots.

Thus the ICT Sector Codes will apply to all enterprises engaging in the above business.

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The Elements

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Element Weighting Points

Code series reference

Ownership 25 AICT100

Management Control 23 AICT200

Skills Development 20 AICT300

Enterprise and Supplier Development AICT400

PreferentialProcurement 25

Supplier Development 10

Enterprise Development 15

Socio-Economic Development initiatives 12 AICT500

B-BBEE Recognition Levels

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B-BBEE Status Qualification B-BBEE recognition level

Level One ≥ 120 points 135%

Level Two ≥ 115 points 125%

Level Three ≥ 110 points 110%

Level Four ≥ 100 points 100%

Level Five ≥ 95 points 80%

Level Six ≥ 90 points 60%

Level Seven ≥ 75 points 50%

Level Eight ≥ 55 points 10%

Non-compliant < 55 points 0%

Amendments and Duration of the Amended ICT Sector Code

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•The Amended Information and Communication Technology (ICT) Broad-Based Black Economic (B-BBEE) Sector Code was gazetted by the Department of Trade and Industry (DTI) on 7 November 2016.

•The Amended ICT Sector Code is effective and legally binding from the date of publication in the government gazette. It is therefore compulsory for all persons, organisations and entities operating in the ICT Sector in South Africa to apply the Amended ICT Sector Code for all verifications from the above mentioned date. Certificates that were issued on the old (2012) ICT Sector Code prior to 7 November 2016 will, however, still be valid until it expires.

The Ownership Scorecard

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Category Ownership indicatorWeighting

pointsCompliance target

2.1 Voting rights

Exercisable Voting Rights in the Entity in the hands of Black

People4 30%

Exercisable Voting Rights in the Entity in the hands of Black

Women2 10%

2.2Economic Interest

Economic Interest in the Entity to which Black People are entitled4 30%

Economic Interest in the Entity to which Black Women are entitled2 10%

Economic Interest of any of the following Black natural persons in

the Measured Entity. NOTE: The maximum points that can be

achieved by any of the following is limited to 3.

3 3%Black Designated Groups;

Black Participants in Employees Share Ownership Programmes;

Black participants in Co-operatives

New Entrants2 2%

2.3Realisation Points

Net Value8 Annexure 100(E)

The Management Control Scorecard

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Category Management Control CriteriaWeighting

pointsCompliance target

Board Participation:

Exercisable voting rights of Black board members as a

percentage of all board members3 50%

Exercisable voting rights of Black female board members as a

percentage of all board Members2 25%

Black Executive Directors as a percentage of all executive

directors2 50%

Black females Executive Directors as a percentage of all

executive directors1 25%

Other executive Management:

Black Executive Management as a percentage of all executive

management3 60%

Black female Executive Management as a percentage of all

executive management2 30%

Senior Management

Black employees in Senior Management as a percentage of all

senior management2 60%

Black female employees in Senior Management as a percentage

of all senior Management1 30%

Middle Management

Black employees in Middle Management as a percentage of all

middle management2 75%

Black female employees in Middle Management as a percentage

of all middle Management1 38%

Management Control Scorecard continued…

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Category Ownership IndicatorWeighting

Points

Compliance

Target

Junior Management

Black employees in Junior Management as a percentage of all

junior management 1 88%

Black female employees in Junior Management as a percentage of

all junior Management 1 44%

Employees with disabilities

Black employees with disabilities as a percentage of all employees 2 2%

The Skills Development Scorecard

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Category Skills Development indicatorWeighting

pointsCompliance target

Skills Development Expenditure on any program specified in

the Learning Programmes Matrix for Black People as a

percentage of the Leviable Amount:

Skills Development Expenditure on Learning Programmes

specified in the Learning Programmes Matrix for Black People as

a percentage of Leviable Amount

8 6%

Skills Development Expenditure on Learning Programmes

specified in the Learning Programmes Matrix for Black People

with disabilities as a percentage of Leviable Amount

4 0.3%

Learnerships, Apprenticeships and Internships

Number of Black People participating in Learnerships,

apprenticeship and Internships as a percentage of total

employees.

4 2.5%

Number of Black Unemployed People participating in training

specified in the Learning Programme Matrix as a percentage of

number of employees

4 2.5%

Bonus Points

Number of Black People absorbed by the Measured Entity or in

the economy at the end of the Learnerships, Apprenticeship,

Internships and Graduate programmes

5 100%

The Enterprise and Supplier Development Scorecard

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Category Enterprise and Supplier Development CriteriaWeighting

pointsCompliance target

Preferential Procurement

B-BBEE Procurement Spend from all Empowering Suppliers

based on the B-BBEE Procurement Recognition Levels as a

percentage of Total Measured Procurement Spend

5 80%

B-BBEE Procurement Spend from all Empowering Suppliers that

are Qualifying Small Enterprises based on the applicable B-BBEE

Procurement Recognition Levels as a percentage of Total

Measured Procurement Spend

3 15%

B-BBEE Procurement Spend from Exempted Micro-Enterprises

based on the applicable B-BBEE Procurement Recognition

Levels as a percentage of Total Measured Procurement Spend

4 15%

B-BBEE Procurement Spend from Empowering Suppliers that are

at least 51% Black owned based on the applicable B-BBEE

Procurement Recognition Levels as a percentage of Total

Measured Procurement Spend

9 40%

B-BBEE Procurement Spend from Empowering Suppliers that are

at least 30% Black Women owned based on the applicable B-

BBEE Procurement Recognition Levels as a percentage of Total

Measured Procurement Spend

4 12%

Bonus points

B-BBEE Procurement Spend from Designated Group Suppliers

that are at least 51% Black Owned.2 2%

Enterprise and Supplier Development Scorecard continued…

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Category Enterprise and Supplier Development CriteriaWeighting

pointsCompliance target

Supplier Development

Annual value of all Supplier [or Partner or Vendor] Development

Contributions made by the Measured Entity as a percentage of

the target.

10 2% of NPAT

Enterprise Development

Annual value of Enterprise Development Contributions and Sector

specific Programmes made by the Measured Entity as a

percentage of the target for Black Owned ICT Entities.

15 3% of NPAT

Bonus Points

Bonus point for graduation of one or more Enterprise

Development beneficiaries to Supplier Development Level.1

Bonus point for creating new jobs up to 10% of the workforce

directly as a result of Supplier Development and Enterprise

Development initiatives by the Measured Entity; OR

1

Bonus point for creating new jobs 11% or more of the workforce

directly as a result of Supplier Development and Enterprise

development initiatives by the Measured Entity.

2

The Socio-economic Development Scorecard

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Category Socio-Economic Development CriteriaWeighting

pointsCompliance target

Annual value of all Socio-Economic Development Contributions

by the Measured Entity as a percentage of

the target

12 1.5% of NPAT

Important Amendments

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The thresholds for classification as an Exempted Micro Enterprise (EME), Qualifying Small

Enterprise (QSE) or Generic Enterprise increased as follows:-

Exempted Micro Enterprise (EME): Annual turnover below R10 million;

Qualifying Small Enterprise (QSE): Annual turnover between R10 million and R50

million; and

Generic (Large) Enterprise: Annual turnover of R50 million or more.

One of the most significant amendments was the amendment of the qualification criteria for ICT entities to achieve a specific B-BBEE compliance level. (as seen on slide 4) The reason for increasing the qualification criteria is due to the fact that there are more points available on the amended ICT scorecard.

The elements on the ICT scorecard were reduced to 5 elements. All entities apart from EMEs will be rated on the following elements:Ownership;Management Control;Skills Development;Enterprise & Supplier Development; andSocio-Economic Development.

Important amendments continued…

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Ownership, Skills Development and Enterprise & Supplier Development elements were identified as Priority Elements. A sub-minimum target must be achieved on each one of the Priority Elements if you are a Generic Entity in order avoid being discounted by 1 level. QSEs must comply with the sub-minimum target of the Ownership element and either the Skills Development OR the Enterprise & Supplier Development elements in order not to be discounted by 1 level.

All Enterprise Development and Socio-Economic Development contributions must be sector-specific. In other words, only ICT entities with at least 51% Black Ownership and with a turnover of less than R50 million will qualify as Enterprise Development beneficiaries. All Socio-Economic Development contributions (not only two thirds) must be spent on ICT specific initiatives. There will be no recognition for general Socio-Economic Development contributions.

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Johannesburg, 2091.

www.beeonline.co.za

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DISCLAIMER

Please note that this presentation is based on information as provided by the DTI, issued on the 7th November 2016 and to the best of our knowledge at BEE Online, the information contained herein is accurate and reliable as of the date of publication, however, BEE Online does not assume any liability whatsoever for the accuracy and completeness of the above information. Any information given in this presentation does not constitute any warranty of any kind whatsoever.